Leading radiosurgery systems maker Accuray Inc (ARAY) has announced preliminary results for fourth-quarter fiscal 2011 (ended June 30). The company expects to report final results after the closing gong on September 19.
The California-based company expects to post revenues between $73 million and $75 million, an increase from $61.4 million registered in the year-ago quarter. The company noted that sales for the quarter include a contribution of $10 million-$11 million from the TomoTherapy acquisition, which was completed in June 2011.
For the fiscal, Accuray envisions flat sales between $220 million and $222 million versus $221.6 million a year ago. The current Zacks Consensus Estimates for the fourth quarter and fiscal 2011 are $69 million and $216 million, respectively.
Accuray also stated that it expects losses in the fourth quarter on account of costs associated with the TomoTherapy buyout. The company has forecast a loss of $25 million-$27 million or 39-43 cents a share for the quarter compared with a profit of $5 million or 8 cents a share in the prior-year quarter.
For the fiscal, net loss is expected between $26 million and $28 million (or 44-47 cents a share) versus a profit of $2.8 million or 5 cents a share a year ago. The current Zacks Consensus Estimates of a loss for the fourth quarter and fiscal 2011 are 41 cents and 46 cents a share, respectively.
Neutral on Accuray
Accuray is a global leader in the field of radiosurgery and provides a non-surgical treatment option for patients diagnosed with cancer. Its CyberKnife robotic radiosurgery systems continue to gain significant traction in the global medical communities, thereby boosting sales.
The acquisition of rival TomoTherapy has bolstered Accuray’s foothold in the radiation oncology space. The merger marked the union of TomoTherapy’s best-in-class radiation therapies with Accuray’s popular radiosurgery systems to create a leading player in the radiation oncology space. The unified company, with combined sales of more than $400 million, will have a significant global presence.
Accuray expects the acquisition to be accretive to earnings in the fiscal year beginning July 1, 2012, and offer opportunities for cost synergies through increased operating efficiencies, complementary patient base and overhead reductions. The company targets operating cost savings of $25 million in fiscal 2013.
While Accuray is expected to benefit from the gradual recovery in hospital capital equipment spending, it remains susceptible to reimbursement uncertainties surrounding its products. Moreover, its CyberKnife systems face a stiff challenge from competitive product offerings of Varian Medical (VAR). Currently, we are Neutral on the stock, backed by a Zacks #3 Rank (Hold).
ACCURAY INC (ARAY): Free Stock Analysis Report
VARIAN MEDICAL (VAR): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment